Sat, Dec. 27, 2008

FSIA and Italian Enforcement

CK - Washington.   A German-Italian dispute related by the International Court of Justice in a press release may eventually affect the construction of the Foreign Sovereign Immunities Act in the United States and similar statutes elsewhere. With its December 23, 2008 petition, Germany seeks the clarification of enforcements of judgments against non-commercial property of a foreign sovereign. The petition of follows proceedings in Italy and Greece resulting in judgments against Germany and subsequent enforcement action in Italy, including a judicial mortgage recorded against German sovereign real estate. The Italian view of international law in this respect is broader than the American and German views. Therefore, a decision by the World Court may produce implications exceeding the reach of the nations involved. The court intends to publish the German petition soon.

Fri, Dec. 12, 2008

Nazis and Free Speech

AK - Washington.   A preliminary injunction barring the publication of a satirical piece in the satire paper Rüsselsheimer Echo mocked the city of Rüsselsheim for two recent Nazi demonstrations--held there after a court ordered it to tolerate them--and its alleged openess to such events, was lifted on December 8, 2008.

The District Court Darmstadt had found the article defamatory and not entitled to constituational free speech protection, granting Rüsselsheim's move for injunctive relief. The Court of Appeals in Frankfurt disagreed in the matter 22 U 23/08. It held the article to be clearly satirical and, therefore, an expression of opinion rather than a factual statement of a misleading nature.

The case goes to the heart of German constitutional law. In deciding whether statements are constitutionally protected, the most important distinction is whether they constitute factual allegations or simple personal judgments without a claim of truthfulness. While the latter are generally protected as free speech, factual allegations have to be accurate to enjoy constitutional protection.

Thu, Dec. 11, 2008

Laptops Enjoined

CK - Washington   A court may keep laptops out of the courtroom, the Federal Constitutional Court in Karlsruhe ruled on December 11, 2008 in the matter 1 BvQ 47/08. A journalist sought mandamus on the grounds that the criminal matter is of substantial public interest.

The constitutionally guaranteed freedom of the press would outweigh ministerial concerns the lower court had raised. The Supreme Court disagreed, in part because of the PC's ability to record video and audio. Notetaking, as needed by the press, can be accomplished with pen and paper.

The restriction imposed is marginal while the potential for violations of housekeeping rules in the statute on the constitution of the courts, §168 Gerichtsverfassungsgesetz, is great, the high court held.

Berlin Accords, a Diplomatic Effort

CK - Washington.   Germany, the United States, six other sovereigns, an international organization and many German businesses concluded the Joint Statement of the Berlin Accords on claims for slave labor and reparations on July 17, 2000.

As a result, it constitutes a diplomatic effort that justifies its review under treaty law as opposed to federal common law in litigation over the disputed enforcement by private parties of interest payments due under the terms of the statement, the United States Court of Appeals for the Third Circuit determined in Elly Gross et al. v. The German Foundation Industrial Initiative et al., docket number 07-3726, on December 10, 2008.

Wed, Dec. 10, 2008

Constitutional Commute

CK - Washington.   The federal legislator reduced constitutionally a politically sensitive tax deduction for commuters. Germany used to allow generous deductions for commuting expenses and drastically changed that rule for 2007.

On December 9, 2008, the Federal Constitutional Court in Karlsruhe ruled new §9(2)(1) of the Income Tax Statute, Einkommensteuergesetz, compatible with the equal protection standard established in Art. 3(1) of the German Constitution. The decision in the matters 2 BvL 1/07, 2 BvL 2/07, 2 BvL 1/08 and 2 BvL 2/08 comes with an official press release in English.

Tue, Dec. 02, 2008

End of Engagement

CK - Washington.   When does the attorney-client relationship, specifically the contract with its warranties, end? On termination, expiration or other terms of the contract, of course. But how about the situation where a contract does not specify a term or its end?

There is no hard and fast rule, the German Supreme Court for Civil Matters, Bundesgerichtshof, in Karlsruhe ruled on November 13, 2008 in a decision published today in the matter IX ZR 24/06.

The inquiry for a court must be facts-centric, it held. The perception of the attorney when the matter is concluded is an important factor, the billing date usually not. The engagement of counsel is not susceptible to the establishment of general rules as to its termination. A court may determine that an engagement is terminated even if an objective fact-finder may conclude that additional activities by the attorney appear warranted.

Sat, Nov. 29, 2008

Rhythm Sampled for Free Use

CK - Washington.   A two-second rhythmic stretch, sampled by musicians from another musicians' recording, triggered litigation for a copyright violation and a judgment in favor of the original creators. On November 20, 2008, the German Supreme Court for Civil Matters in Karlsruhe remanded the matter to the Hamburg Court of Appeals for an examination of the free use doctrine as applied to music sampling.

While §85 of the German Copyright Act protects the first work, its §24(1) contains exceptions permitting the free use of others' creations. A recycled melody remains protected but the sound bit at issue deserves further factual exploration and legal analysis which the appellate court had failed to perform, the court explained in Metall auf Metall, docket number I ZR 112/06. [German Law, German Copyright, Urheberrecht, Sampling, Supreme Court, Bundesgerichtshof]

Fri, Nov. 28, 2008

Defendant Unidentified in News

CK - Washington.   May German media publish the names of criminal defendants in their court reports? That is the central issue in the matter 1 BvQ 46/08, involving media concern N24 and the presiding judge of the Oldenburg court, addressed by the German Constitutional Court in Karlsruhe on November 27, 2008.

The Karlsruhe court declined to issue a TRO in favor of N24 that challenged a lower court order disallowing media reports without an anonymized or pixelated identification of a defendant.

The constitutional basis for the challenge is article 5 of the federal constitution, the guarantee of freedom of the press. That guarantee is subject to a balancing against other constitutional protections, in this instance the so-called personality rights of the defendant. [German Law, German Constitution, Press Freedom, Injunction, Supreme Court, Bundesverfassungsgericht]

Thu, Nov. 27, 2008

Constitutional Rulings in Germany

CK - Washington.   The German Federal Constitutional Court in Karlsruhe recently published the following decisions. The dates follow the day, month and year format. Cases are not cited by party names. Instead, German citation rules rely on the docket numbers. The court publishes its decisions in German although it releases some press statements in English.
  1. 1 BvR 2456/06 dated 12.11.2008: Nuclear storage permits.
  2. 1 BvQ 41/08 dated 06.11.2008: Appointment of notary.
  3. 1 BvR 1008/08 dated 05.11.2008: Constitutionality of statute.
  4. 1 BvR 2587/06 dated 04.11.2008: Civil litigation in employment matters.
  5. 2 BvR 270/08 dated 03.11.2008: Employment litigation involving civil servant.
  6. 1 BvR 256/08 dated 28.10.2008: Injunction against surveillance.
  7. 1 BvR 2147/08 dated 23.10.2008: Dismissal of constitutional petition.
  8. 2 BvR 749/08 dated 22.10.2008: Criminal protective measure.
  9. 2 BvR 2028/08 dated 22.10.2008: Extradition to Russian Federation.
  10. 1 BvR 1217/08 dated 22.10.2008: Statute of limitations in Civil Code.
  11. 1 BvR 1218/08 dated 22.10.2008: Statute of limitations in Civil Code.
  12. 1 BvR 1219/08 dated 22.10.2008: Statute of limitations in Civil Code.
  13. 1 BvR 2275/08 dated 20.10.2008: Parental custody.
  14. 1 BvR 1138/06 dated 15.10.2008: Tax enforcement after changed precedent.
  15. 2 BvR 236/08, 2 BvR 237/08 dated 15.10.2008: Surveillance and data storage in telecommunications.

Sat, Nov. 22, 2008

RAF and Guantanamo

CK - Washington.   Was German due process afforded its RAF terrorists better or worse than the Guantanamo response to terror? That is one of the many questions The Baader Meinhof Complex movie generated at its East Coast premiere last night at the AFI in Silver Spring, Maryland.

Stefan Aust of the influential Der Spiegel magazine presented an eyewitness account of the Red Army Faction period and the making of the film. Unfortunately insufficiently prepared for explaining with proper legal terms matters such as detention, transcripts or due process, he inferred that German anti-terror authorities deviated from due process standards of the German legal system but not as badly as the Bush administration does with Guantanamo.

Overall, the film--which plays again on Sunday--places the state in the dock, without defense counsel, next to the terrorists. In the 1970s, American police seemed scarier than German police and some could remind foreign visitors of the Gestapo rather than the expected enlightened implementers of the famed American due process of the law. Much has changed in both countries, and Guantanamo is probably not the fairest contrast to German anti-terror policy of thirty years ago.

Sun, Nov. 16, 2008

In Cahoots or Independent?

CK - Washington.   German Association of Judges -- the name does not tell all. A subtitle under the heading Deutscher Richterbund reads in translation: Association of Judges and Prosecutors. The long German version states, more politically correct and in consideration of the variety of genders within the professions: Bund der Richterinnen und Richter, Staatsanwältinnen und Staatsanwälte.

What are we to infer from that alignment of judges and prosecutors? Does it not confirm images conjured by movies about Nazi-era injustice? Does it accurately reflect the independence of judges guaranteed by the post-Nazi constitution?

The history page of the association's web site explains how the group formed in 1908, long before Hitler emigrated to Germany. The page discusses the post-1933 developments as well as the subsequent reflections on that era and lessons learned from the Nazi perversion of justice. Any bad taste should be reserved today to the alignment of judges and prosecutors who cozy up to the striking exclusion of other German lawyers.

Sat, Nov. 15, 2008

Gift Certificates Limited

CK - Washington.   Gift certificates sold on Amazon websites in Germany may not contain a binding forfeiture date, the Munich court of appeals determined in a decision now published at the Dr. Damm website. The January 17, 2008 ruling in the matter 29 U 3193/07 stresses the voidness of such time constraints. The court enjoined the use of terms and conditions that so limit the validity of gift certificates, subject to a civil fine of up to €250,000 for future violations.

Tue, Nov. 04, 2008

Elections in Germany and the United States

AK - Washington.   German federal elections -- the next one will be held in October 2009 -- differ substantially from their American counterparts. The German political system does not employ an electoral college system. In a parliamentary democracy such as Germany, voters elect members of parliament, Bundestag, in their precincts. Each of the two major German parties presents a candidate for the chancellorship, through decisions made by party elders, not the electorate in primaries.

Once the federal diet is elected, members of parliament pick the chancellor. The views of the electorate reflect that choice because each party's share of the popular vote gives them a corresponding number of seats in parliament. The president, Bundespräsident, officially appoints the chancellor and the members of the cabinet. Bound by the intent of the Bundestag, the president may not deviate from its choice.

The rules for federal elections in Germany are laid down by federal statute, Bundeswahlgesetz. A federal elections agency, Bundeswahlleiter, is responsible for the electoral process. For state elections in the German states, Länder, the principle of federal allegiance, Prinzip der Bundestreue, guarantees constitutional procedures.

Votes are cast by paper ballots. There are no and efforts to use electronic voting machines are the subject of litigation before the federal constitutional court in Karlsruhe. Some Länder are exploring means to enable electronic absentee voting in the next election cycle.

In sum, German and American elections differ substantially. Some similarity exists in the indirect elections of presidents in the United States and of chancellors in Germany. There appears to be consensus that the German parliamentary vote better reflects the popular vote than the electoral college. After World War II, American advisers had assisted Germany in developing the electoral system and their experiences influenced the constitutional structures in Germany.

Sat, Oct. 25, 2008

German Top Courts

CK - Washington.   America may have more supreme courts than Germany, but Germany operates more top courts at the federal level. Here is a list, with the proper names and descriptive equivalents in English:

Federal Constitutional Court
Federal Supreme Court
Federal Supreme Administrative Court
Federal Supreme Employment Relations Court
Federal Supreme Social Court
Federal Supreme Tax Court
Federal Supreme Patent Court
The Federal Supreme Court enjoys jurisdiction for matters not reserved to the other special supreme courts, such as civil and criminal disputes. State constitutional matters fall within the jurisdiction of state constitutional courts listed at Deutsche Justiz.

Fri, Oct. 24, 2008

Web Deposits Required

CK - Washington.   Like the Library of Congress, Deutsche Nationalbiblithek serves as a depositary for published works. On October 23, 2008, a statutory amendment expanded the deposit requirement to include Internet publications.

The extraterritorial reach of the new regulation, Pflicht­ablieferungs­verordnung, will be an interesting issue to watch. International publishers protested in an uproar some twenty years ago when the Library of Congress expanded its reach and attempted to enforce deposits on foreign publications.

The definition of Internet publications subject to the German deposit requirement is vague. There is an ongoing discussion in Germany about the application of the regulation to non-commercial Internet publications. The regulation implements §20 of the Statute on the German National Library. DNB maintains a FAQ on web publications.

Mon, Oct. 20, 2008

Central Criminal Records

CK - Washington.   Beginning January 1, 2009, criminal records from the federal register will become available through electronic transmission. The federal attorney general issued a press release on October 15, 2008, explaining that the federal cabinet in Berlin passed the required regulation which the federal second house, Bundesrat, is expected to approve.

What is odd about the release is the lacking reference to the federal diet which is normally in charge of legislation. Another odd element is the mention of a regulation, not a statute, that will effect the change.

The regulation is likely the result of a rulemaking effort of such significance that the aggregate of the departments represented in the cabinet needed to consent. The attorney general notes that the change will not affect privacy laws.

Thu, Oct. 16, 2008

German Contract in English

CK - Washington.   German managers live under the Damocles sword of jail time for a failure to act timely when insolvency looms. Knowing the manager's rights and responsibilities is important. Therefore, a dual-language employment agreement for foreign managers of German corporations is useful.

The Rechthaber blog announced the publication of such agreements on October 16, 2008 and started its series with a German-English manager agreement for a limited liability corporation, GmbH. One size does not fit all, and that is particularly true with legal translations.

One could argue that the term loophole may not always be the proper equivalent of the German term Regelungslücke. Similarly, the reservation of rights to shareholders may not necessarily mean that [i]t shall be incumbent upon the General Assembly to determine … the allocation of business ….

Still, the first, eight-page document in the new series represents a useful approach to introducing foreign readers to the drafting style and general content of such German agreements which in a specific situation would be customized.

Wed, Oct. 08, 2008

Help the Criminals, Orderly

CK - Washington.   Instead of doing away with the ill-conceived identification requirement for active users of the Internet, the Berlin Department of Justice provides a guide on compliance with the underlying statute, TMG, and the suggested style of publishing identificying information on web sites. On October 7, 2008, the Attorney General also issued, with some pride in her lines, a press release to the requirement which Germans call Impressum.

The department's Guide to the Identification Requirement, published only in German, links to the statute which establishes the requirement for commercial users of the Internet and three sub-guides on (a) why the identification is sought; (b) how to meet the requirement; and (c) what more one can do, such as using seals of organized approval.

The identification requirements is hotly contested in German courts but the rationale is not. For the first reason, the Attorney General calls her guidance non-binding. The second aspect relates to the purported benefit of consumer protection on the mistaken belief that fraudulent vendors would properly identify themselves and Internet user information would not fall more easily victim to phishers, stalkers and other criminals by way of forced disclosure of personal, contact, tax, corporate, supervisory authority and banking information.

Chilling free speech is another topic on which A.G. Zypries remains silent. The identification requirement is generally acknowledged to have extraterritorial effects and is construed by courts to also cover certain non-commercial activities on the Internet.

Tue, Oct. 07, 2008

German American Blog Day

CK - Washington.   Blawg Review #180 at Law Pundit provides a comprehensive overview of German-American issues. President Reagan proclaimed German-American Day in 1987. The Blawg Reviews are of more recent vintage. Andis Kaulins assembled an impressive amount and quality of information on German-American relations with an emphasis on law and blogs.

Mon, Oct. 06, 2008

German Terms of Employment

CK - Washington.   German employment law may be one of the neglected practice areas, in terms of English-language coverage.

In the international context, the statutes and precedent on German employment matters, Arbeitsrecht, assume a somewhat unique position, however, at least from a German perspective. Germany believes that her legal system causes few, if any, extraterritorial effects. Employment law proves the exception. German law can easily conflict with American law in employment matters, and its extraterritorial reach is undeniable.

Berlin attorney Jessica Ohle provided an overview of German compensation rules and practices in English, in her note Recent Trends in German Employee Compensation, 17 German American Law Journal, on October 2, 2008.

Sat, Sep. 27, 2008

German American Community Service

CK - Washington.   Klaus Lederer, a German manager convicted in Germany resides in Florida. In a German court, he received a suspended jail sentence and an order for 1,000 hours of community service, the German law blog reports. The Florida community may be served, the court allowed.

A less curious and more serious aspect of the conviction is the crime: Lederer failed to file timely for bankruptcy. So serious, in fact, that the sentence is for the suspended 18 months imprisonment, the community service and a fine of 250,000 Euros.

Lederer admitted the crime, so, presumably, he knew about the effect of the conviction on his immigration status. A German web site notes that Lederer initiated the proceedings with a voluntary disclosure arising from tax issues under the German American tax treaty. The blog speculates that more German white collar criminals may want to move to sunny places before their sentencing hearing.

Fri, Sep. 26, 2008

Practitioner on new Corporations

CK - Washington.   A practitioner's overview of the new corporate forms that both houses in Berlin approved and may become law by November 1, 2008, is available at the Tysk Ret web site.

Although written for a Scandinavian audience, the German-language presentation of the MoMiGM amendments, as they are known in Germany, is useful for planners and negotiators from common-law nations.

The author, Christian Sagawe, introduces the new corporate vehicles and explains their use with mixed corporate forms which are very popular funding mechanisms in German business.

Sun, Sep. 14, 2008

Discretion in Privacy Law

CK - Washington.   The Dr. Bahr Collection publishes a Hamburg ruling of June 6, 2008 in the matter 324 0 1069/07 on the obligation of Internet publishers to suppress the name of a defendant in a criminal matter. Under German privacy and personality laws, a convicted defendant may be entitled to have any mention of a conviction expunged from Internet publications, just as it would be expunged from criminal records after the statutory periods.

In the June decision, the court analyzed the requirements in a situation involving a defendant in a current matter. It found the public interest in reporting on the case and the defendant to prevail over the privacy interest of the defendant. As a result, there is no obligation on online publishers to suppress the name of a defendant or to limit publication of a name to the initials -- at least while the convicted criminal remains in prison.

The constitutional protection of privacy, known as Persönlichkeitsrecht, is protected by art. 1 of the German federal constitution. It may outweigh the public interest in minor criminal cases. Therefore, publishing the full name a person may lead to a civil liability when the person is convicted of parking at an expired meter.

The new decision is in line with a December 18, 2007 ruling in the matter 7 U 77/07 involving the publication of the full name of a murderer after he had completed his prison term. Generally, German courts and media do not publish the full name of defendants, although that is only a tradition and such publication is not prohibited.

Sat, Sep. 13, 2008

German iPhone Litigation

CK - Washington.   iPhone litigation in Germany is heating up. Monopolist iPhone seller T-Mobile lost its challenge to a July 28, 2008 injunction won by VoIP provider Indigo Networks, operator of the Sipgate service. The injunction bars the traditional phone company from advertising a flat-rate tariff as a free flat data rate when it is in fact limited.

The Hamburg district court found in favor of Sipgate on September 10, 2008 but the written decision in the matter 315 O 360/08 is not published. Indigo had argued that T-Mobile reduces the Internet access speed and prevents customer from using chat and VoIP services. The reported basis for the injunction is § 5 UWG, the German statute against unfair competition.

Also on September 10, 2008, T-Mobile obtained an injunction preventing the German VoIP provider from offering a Sipgate beta software add-on to the iPhone that enables iPhone users from using free Sipgate telephony services. Reportedly, one of the arguments against the Sipgate offer is the term beta used to the describe the development status of the software module. The court is said to consider the term beta confusing to consumers.

Tue, Sep. 09, 2008

Media Censorship: Grassroots Meet

CK - Washington.   Censorship in Germany is no more prevalent than censorship is in the United States. Unlike strange FCC rulings, and with rules similar to those in other European countries, Germany requires many writers on the Internet to disclose their identity and many other details. The concept is known as Impressum. There is no groundswell of protest against such censorship because the notion of Impressum is grounded in consumer protection.

The dangers to consumers from the required disclosure of personal information and the dangers to free speech are generally ignored. Almost single-handedly, a Hamburg man has been working on a grassroots campaign to fight censorship in Germany. His target is the press and media law chamber at the Hamburg District Court led by a judge whose last name inspired the intrepid fighter for free speech to invent an -ism and to call his website

On September 12 through 14, 2008, its author, Rolf Schälike, plans a meeting in Hamburg and has extended an open invitation to all interested in misguided decisions of that chamber and censorship in general. Schälike's focus is not the Impressum requirement.

Rather, he finds fault in the court run by Andreas Buske which has become the forum of choice in Germany for unusual decisions against publishers, including bloggers, and on third-party liability, such as blogger liability for third-party comments. In a country where judges do not enjoy the royal respect that seems to prevail in the United States, the three-day gathering should witness a great deal of unrestrained speech.

Wed, Aug. 13, 2008

Lost Between the Lines

MJW - Washington.   A peculiar aspect of German labor law is the letter of recommendation known as Arbeitszeugnis. It reflects part of an employment record issued with an employer and provides details on the term and scope of employment. The letter is also expected to contain information on performance and conduct. Generally, prospective employers expect to receive copies of such letters with an application.

Therefore, the exact wording is important and sometimes hotly disputed in employment litigation. As a result, personnel managers have developed codes to convey information in a manner that meets the legal requirements for such letters as laid down by statute in § 109 Gewerbeordnung or § 630 Bürgerliches Gesetzbuch and construed in a long lines of precedent by Germany's Federal Labor Court, Bundesarbeitsgericht.

Employees fear that such codes, including omissions of specific language, may contain kind words that a prospective employer may decypher in a way they themselves do not understand. Others believe that certain carefully crafted nuances may be lost on a less sophisticated HR department.

On August 12, 2008, the Federal Labor Court laid out general guidelines in the matter 9 AZR 632/07. A journalist, dissatisfied with his Arbeitszeugnis, sued his former employer. His complaint focused on a statement regarding his performance and conduct that he thought was deliberately omitted. The letter did not mention his ability to work under pressure.

The court used the case to reiterate the basic principles governing such letters. The employee's performance and conduct must be described favourably and truthfully, Grundsatz der Zeugniswahrheit, it held. Excluding certain elements that prospective employers usually expect from their employees without proper justification collides with this principle.

The omission itself can serve as a secret message which--depending on usages in particular trades and professions--may adversely reflect on the employee. In such instances, an employee may demand from the employer an amendment of the letter of recommendation, the supreme labor court held.

Sun, Aug. 03, 2008

Free Speech Victory for Blog

CK - Washington.   The pendulum swings again: At least non-commercial German bloggers are not responsible for third-party comments, a Frankfurt court decided on July 16, 2008 in the matter 31 C 2575/07-01. The decision flies in the face of some rulings from other German courts which came close to imposing on bloggers a requirement for real-time censorship.

Veteran German blogger and fresh lawyer Sascha Kremer published the Frankfurt decision, in German, on his firm site. The judge in the case appeared to understand the medium and the dangers of censorship as well as the remedies applicable to online defamation. For another view, see Mouse Roars, Stops Comments.

Wed, Jul. 30, 2008

Collection on Civil Judgments

CK - Washington.   Efforts in the enforcement and collection on civil judgments should be supported by the German customs service, Zoll, Berlin attorney general Brigitte Zypries suggests with a bill likely to pass as federal law. The role of customs will be limited to providing its online auction service platform. Without the currently-required petition by a judgment creditor or debtor for an online auction, the new statute will permit the sheriff to sell attached goods at In addition, the platform will service tax collection efforts. On July 29, 2008, Zypries argued that online sales will enhance revenues for the benefit of both creditors and debtors.

Thu, Jul. 17, 2008

Beware the German Domain Rule

CK - Washington.   In the dim ages of the Internet, trademark law and domain law were two separate branches of the law. Trademark law addressed priorities and the domestic, territorial nexus of vendor and goods or services. Domain law resolved issues of a global first come, first served addressing system for web and other Internet techniques. Trademark lawyers didn't understand the domain name system and began to apply trademark law to it, then prevailed on legislators to outlaw the first come, first served foundation of domain law.

Germany and the United States went parallel paths in that evolution. Now, a German court vigorously pedales ahead of the peleton by applying German trademark law extraterritorially. It tells a Gulf state corporation to use .ae domains, not .com domains. Its .com domain would indicate commercial activity. Its commercial activity is noticeable in Germany. In Germany, there is a trademark owner with a mark akin to the domain name. The .com domain violates the trademark in Germany, a .ae domain would not.

The Düsseldorf Court of Appeals sticks its neck pretty far out. Germany tends to complain of American adventures into the extraterritorial application of laws. In its ruling 1-20 U 93/07 of April 22, 2008, the German court does not do only that but gratuitously volunteers a redefinition of domain extensions. Certainly, .com has always been understood to cover any use that is not .mil, .gov, .edu and to some extent .net and .org, although the latter two went through evolutions where they now allow for any use.

Generally, .com has not been understood as principally representing global commercial as the Düsseldorf court makes it out to be. Global commercial activity was one of the activities the .com extension could cover, but its principal characteristic was that it was not .edu, .mil and .gov.

As a result, any .com use can now be challenged under German trademark law in a German court, especially where the web site is maintained in a subsidiary German language version. The court found such a version indicative of targeting customers in Germany, despite the fact that German is used not only in Germany. To be on the safe side, web designers may want to use a Liechtenstein flag to point to a German-language presentation on a .com web site.

Wed, Jul. 09, 2008

LLM in Restructuring

CK - Washington.   Heidelberg University Law School announced a new type of LLM program for corporate restructuring. The program targets both domestic and foreign students and covers, among other topics, international insolvency and associated tax and corporate issues.

Tue, Jul. 08, 2008

Confession Under Torture

MJW - Washington.   On June 30, 2008, a decision in one of the most controversial cases in recent German criminal history was delivered. The judgment came from the European Court of Human Rights, ECHR, in Strasbourg in the case of Gäfgen v. Germany, application no. 22978/05.

In late 2002, Gäfgen kidnapped and suffocated a boy. Upon the defendant's arrest, the police believed the boy still to be alive. When he first would not disclose the boy's whereabouts, the local deputy chief of police instructed the interrogating officer to tell Gäfgen he would suffer considerable pain unless he disclosed the boy's location. Gäfgen then confessed killing the boy and hiding the corpse.

The Frankfurt Regional Court, Landgericht, convicted him of murder and other felonies and sentenced him to life. After failed appeals to German courts contesting the use of evidence obtained through torture, Gäfgen took the case to the ECHR.

The decision emphasizes the importance of Article 3 of the European Convention of Human Rights. Art. 3 prohibits torture and inhuman or degrading treatment or punishment. The EHCR holds that even in the event of a public emergency threatening the life of a nation, no exceptions or derogations are permissible. In light of the threat that caused Gäfgen considerable mental suffering, the EHCR finds the police treatment inhuman under Article 3. However, the criminal court had not violated Gäfgen's right to a fair trial protected in Article 6 para. 1 of the Convention. The use of evidence directly or indirectly obtained through Gäfgen's confession which in turn was extracted by means contrary to Article 3 would have most likely rendered the trial unfair. As it happened, the conviction relied on the confession Gäfgen made in court.

Sun, Jun. 22, 2008

Compliance Surcharge

CK - Washington.   Compliance after 9-11 has become cumbersome and expensive. In the early 1990s, some thought export controls would all but disappear. Instead, export controls grew, OFAC controls became far-reaching and 9-11 pushed restrictions and compliance obligations into foreign legal systems. The Obiter Dictum blog in Germany notes strange effects on ordinary business. Freightforwarders are now adding a compliance charge to their invoices. Massive changes in the technical infrastructure and updates of software to include embargo list cause one such company in Germany to levy a compliance surcharge of 2.65 Euros on each transaction.

Fri, Jun. 13, 2008

IP Address for Private Suitors

CK - Washington.   The release of IP addresses by ISPs to private parties may be technically useless but in Germany, it can violate constitutional protections afforded Internet users. A May 21, 2008 order from the Frankenthal district court disallows the use of an IP address as evidence in a copyright dispute. The private party had obtained contact data of the user to whom an ISP supposedly had assigned the address, by way of filing a criminal complaint and subsequently reviewing the results of an investigation conducted by the D.A.

Lacking a discovery process in German law, the criminal avenue serves as the customary path for music, software and movie companies to the perceived identity of violators of copyrighted material they market. While there is ample technical evidence in the United States that IP addresses are unreliable as evidence in litigation, marketers of copyrighted assets in Germany rely on IP addresses for their criminal and civil prosecutions.

In February 2008, the Constitutional Supreme Court had invented a new constitutional right to informational self-determination. In March, it limited to serious crimes the release of contact information based on collected Internet traffic data, case number 1 BvR 256/08. The Frankenthal court applied the guidelines to the copyright matter at hand which involved allegations of copyright violations through the use of Internet services.

Many commenters question the applicability of the Supreme Court guidelines to the instant case, case number 6 O 156/08, and believe the order will not resonate in similar proceedings. Much of the discussion turns on the data protection statute and the distinctions for preserving and using data such as IP addresses.

In turn, such data may be classified in different categories and for various purposes, none of which have been reconciled by courts and commenters into clear rules, while the federal legislators keep fiddling with the statutes governing the Internet. For example, the attorney generals of the states on June 12, 2008 called for direct access of copyright owners to ISP and customer data, Heise reports.

Mon, Jun. 02, 2008

Unfair Competition Defined

CK - Washington.   A catalog of 30 unfair acts in retail competition will form the cornerstone of an amendment to the statute against unfair competition in Germany, Gesetz gegen den unlauteren Wettbewerb or UWG.

The Berlin Attorney General provided examples of unfair acts in a press release of May 21, 2008. The list implements the 2005 EU directive 29.

The new black list approach seeks to provide consumers with fair treatment throughout the European Union while assuring sellers of uniform requirements. The German text of the bill, Erstes Gesetz zur Änderung des Gesetzes gegen den unlauteren Wettbewerb is available for download.

Fri, May. 23, 2008

Internet Contact Data Explained

CK - Washington.   A 2007 decision recently added to the MIR index reminds the author of crazy German laws and an unimaginative decision. The spam-friendly statute on the identification of internet users, Telemediengesetz, also requires web writers to state contact information. Is a contact form sufficient, or is the statement of an email address necessary?

It's the statement, the Essen district court warned an Internetter on September 19, 2007 in the matter 44 O 79/07. The statute wants a statement, not merely a means to contact the web publisher, it writes. That rules out a contact form on a web site or innovative means other than an email address.

Technically, the decision makes no sense. A contact form can use the mail SMTP protocol which queues an email notice to the recipient's POP or IMAP or web email box, just like an email client would. A statement such as mail2:// is no better than a statement like The latter is safer and minimizes spam traffic. But that's not what the Essen court's fourth commercial division held In the Name of the People.

It found against the publisher on the basis of anti-competitive conduct evidenced by is failure to state an email address. The misguided ruling is a sad example of how a statute and its uninformed application can make Germany less competitive--in this case by hampering advances in communications. A courageous court could have voided the invasive statutory identification and contact requirements as vague and taken the country somewhere.

Tue, May. 20, 2008

Inviolability of Law Offices

.   Searches of, and seizures in, law offices require enhanced constitutional scrutiny, the German Constitutional Supreme Court in Karlsruhe decided. In its press release of May 20, 2008, the court emphasizes the general inviolability of the abode and the particular sanctity of the premises of attorneys.

An attorney had filed an objection succinctly questioning the impartiality of a judge. The judge filed a criminal complaint. The prosecution searched the office and home of the attorney and reviewed and seized files. In the matter 2 BvR 1801/06, the highest German court ruled for the attorney.

The constitutional court stressed the proportionality requirement for searches and seizures. In its opinion, the lower courts in Osnabrück had not properly balanced the alleged offense and the constitutional protections.

The alleged defamation of a judge does not justify an infringement of constitutional rights, especially where the prosecution could have used means that would not affect the heightened protection necessary for the legal profession, the court held.

Mon, May. 19, 2008

IP Litigation Coverage

.   For the longest time, German insurers would not touch insurance coverage for the legal cost of IP litigation. Now, an insurance product provides such coverage for patent and trademark litigation.

The cost of litigation in Germany is generally more predictable in Germany than the United States because of fee statutes that pin attorneys fees and court costs to the value in dispute, Streitwert. Ignoring flexibility added to the fee statutes in recent legislation, insurers can base their calculations on the statutes and not the hourly fee agreements that have become more common.

Darmstadt-based GMP GmbH is said to be the first insurer offering an insurance plan for IP litigation. The GMP plan is available to individuals and companies with up to 100 employees. [Insurance coverage, ]

Thu, May. 01, 2008

Internet Auction and Trademark

CK - Washington.   After a recent change in the law on online provider liability, the German Supreme Court confirmed its prior view on the liability shield for internet service providers in cases of trademark violations committed by their customers.

On April 30, 2008, the court found in the matter I ZR 73/05 - Internet-Versteigerung III an auction platform liable for failing to suppress customer postings of fake items bearing trademarks. The court noted that the liability of providers is limited in the case of criminal violations and civil damages. The limitation of liability in the new statute, Telemediengesetz, does not extend, however, to claims for the removal or suppression of material that violates trademarks.

The facts at issue involve an offer at auction for watches with a statement identifying the watches as unauthorized replicas. After receiving notice from the trademark owner, the online auctioneer is required to remove the posting, the court held. In addition, it required online providers to take preventive action when they know that future postings of a similar nature are likely.

Fri, Apr. 11, 2008

Reform of German IP Law

CK - Washington.   On April 11, 2008, the federal diet in Berlin passed a statute for a comprehensive reform of IP laws in Germany. The website of the Berlin attorney general presents a detailed overview and links to the new statute and related material.

The new IP rules affect patents, design patents, mask works, copyrights, plant varieties, trade marks and identifications of regional origin for agricultural products and foodstuff.

The outlook of the statute is international because it implements in large part the German version of an E.U. directive, 2004/48/EG, ABl. EU Nr. L 195, 16.

Occasionally, the attorney general publishes material in English on its web site. The new IP regime in Germany may be described there in the future. Readers should not confuse this new effort with the reform of copyright law which became effective on January 1, 2008 and is already the subject of a note at the site.

Tue, Apr. 08, 2008

Casino Sets Go, Collects

CK - Washington.   A German Internet casino license limits the plaintiff casino to Internet games with persons resident in the state of Hesse. It sought to collect from a player who had faked an address in the state, had set no limit and argued that the casino website failed in its limit function. In addition, collection efforts should be barred as the online gambling business is immoral and the online contract is void under the Civil Code.

On April 3, 2008, the German Supreme Court in Karlsruhe, Bundesgerichtshof, ruled in favor of the casino in the matter III ZR 190/07. Section 134 of the Civil Code does not apply because the casino did not violate statutory restrictions. In addition, it was properly licensed and sought to keep Internet gamblers in compliance with the terms of its license.

The court reviewed the limit issue from two perspectives. One, the fact that the license required a limit and the website did not enforce it, does not constitute a violation of the statute governing the casino, the court held. Two, the failure of the limit function did not lead to voidness by reason of unconscionability or reprehensibility under section 138 of the Civil Code.

Fri, Mar. 28, 2008

Abuse of Prosecution

CK - Washington.   Prosecutors and courts are short on resources in North Rhine-Westphalia. Huge sums are spent on their criminal investigations of alleged copyright violations by Internet users.

The Wuppertal D.A. is now in trouble with the music industry and the justice department because the office refuses to process mass complaints filed by the music industry. Aside from the expense, the dispute involves a systemic issue in German civil procedure.

Discovery in civil matters relies frequently on the results of a criminal investigation which the prosecution shares with complainants. The music industry got used to D.A.s identifying violators which the industry would then civilly pursue in order to collect damages. The D.A.s feel that they are being abused as cheap investigative service in support of the industry's collection efforts and revenue streams.

Mon, Mar. 24, 2008

Major German American Law Day

CK - Washington.   The German branch of the German America Law Association brings its various specializations together at the annual Joint Specialities Day. In 2008, the event will take place on April 19, 2008 in Frankfurt.

Experts from the United States, Germany and other countries will present and explore topics ranging from ICC arbitration to transnational IP and M&A. issues. The extensive agenda for the Gemeinsamer Fachgruppentag and registration form are available for download from the DAJV web site.

Fri, Mar. 14, 2008

Dr. SJD or PhD in Germany

CK - Washington.   In "Doktor" Verboten for Non-European PhDs, the Washington Post touches on German police investigations of Americans who use and describe, apparently entitled to do so, their America-earned PhDs as the German equivalent Dr. Sometimes, it seems, there are no Germans who are not Doktors, although Austria actually beats Germany in addressing lawyers as doctors. So why the fuss?

Transblawg has more on the subject and narrates some of the author's experiences. The graduate of English institutions and renowned translator of legal documents who practices in Germany refused to deal with the formalities and fees required for recognition of her titles in Germany and suffered the consequences. Fortunately, in a European context, that is no longer an issue.

But non-Europeans still suffer discrimination. The policy underlying the abstruse criminal statute reflects a fear of Germans getting taken in by customers of diploma-mills and fake cops. A simple solution would be a humbler attitude, such as eliminating titles from business cards and everyday life, but that seems illusory.

Alternatively, this author would agree to a simple world-wide superscript number for each legal education program one has survived, such as L4. Lots of comments at the Post propose additional approaches.

Tue, Mar. 11, 2008

Criminal Cooperation Germany - USA

CK - Washington.   German attorney general Brigitte Zypries published a press release of a meeting she and her colleague Schäuble, Secretary of the Interior, had on March 11, 2008 with the American federal attorney general, Michael Mukasey. The signed a bilateral agreement to intensify cooperation in major criminal matters, the German press release states. Among key provisions, the two nations will transmit personally-identifiable, biometric data to the other without specific request. Information sharing will extend to the data available under the European Prüm agreement of 2005 which includes DNA. Data protection provisions complement the exchange of information provisions. Mukasey released a statement in English.

Wed, Mar. 05, 2008

Finals: Ready, Set, Stop!

CK - Washington.   Law school in Germany takes seven semesters or more. When you feel you are ready for the comprehensive final, you want to get it behind you. To their dismay, Heidelberg law students yesterday arrived at the assigned test center only to find fire engines and closed doors. The Heidelberg court house where the written exams were supposed to take place, suffered a fire.

The test was rescheduled for today which will bring the Heidelberg exam out of sync with the rest of the state of Baden-Württemberg. The Staatsexamen is a final state-wide examination with a stress level possibly exceeding that of the bar exam in D.C. The bar takes two days while the German first exam in law lasts almost a week and is topped off with orals scheduled a few months after the written part.

In addition, the bar is the culmination of a perpetual exam season that begins in the first semester of law school. By contrast, there are few interim tests in a German law school--although Heidelberg now offers a preparation program for the state finals. Then suddenly, a marathon of daily exams lasting five hours each.

To make things worse for the poor Heidelbergenses, who rely on street cars and buses, the public transportation system is set for a strike tomorrow morning. Seems like the candidates might as well spend the night at the Weinloch in Untere Strasse or similar establishments designed to fill the meek with courage.

Tue, Mar. 04, 2008

Discovery of Constitutional Right

GC - Washington.   Germany's constitutional court in Karlsruhe ruled February 27, 2008 that authorizing online searches of personal computers is unconstitutional. The landmark ruling in cases BVerfG 1 BvR 370/07 and 1 BvR 595/07 came in response to a case filed by former North-Rhine Interior Minister Gerhart Baum, three lawyers and a journalist.

The ruling overturned a 2006 law adopted in the state of North Rhine-Westphalia giving intelligence agencies wide-ranging powers to hack into terror suspects' computers using Trojan-type software. Justice Hans-Jürgen Papier wrote the voided law violated citizens' constitutional right to privacy.

Intelligence agencies will now only be permitted to collect data from computer hard drives if there is proof its use would protect human lives or if evidence shows state property is endangered. After securing permission, law enforcement agencies may upload spyware onto a suspect's computer through email.

The establishment of a constitutional right to PC privacy initiates opportunity for a more in-depth look at Internet security surveillance and provides a basis for future debates on security and information technology. Justice Papier commented in a separate statement that for the first time, the constitution is protecting the confidentiality and integrity of information technology systems.

The newly-discovered constitutional right changes the legal and political landscape dramatically. It appears to ban a long-discussed federal move for draft legislation to expanded the authority of federal investigators in Internet matters.

Sat, Mar. 01, 2008

Violation of Consular Rights

CK - Washington.   The ICJ LeGrand decision against the United States provided the German Supreme Court, Bundesgerichtshof, with an opportunity to explore the remedies available to compensate for evidence obtained from foreigners before they received advice on their right to consular notification.

German customs agents had interrogated appellants crossing the border and explained their Miranda-type rights through an interpreter. In the arraignment proceeding and after appellants had made statements relating to a violation of narcotics laws, the judge advised the appellants of their right of consular notification under article 36 of the Vienna Convention on Consular Relations of 1963. The appellants waived notification and continued to make statements. The resulting criminal conviction was based in part on their statements. An appeal to the Supreme Court followed.

In the matter 3 StR 318/07, the court noted that the failure to advise appellants of their treaty right--as soon as the customs agents realized appellants were foreigners--was inexcusable. It examined the treaty obligations and remedies for the use of the poisonous fruit in the criminal case, especially in light of the Avena and LeGrand decisions of the International Court of Justice.

Analyzing the LeGrand ruling, the court held that the ICJ had opened a path to various remedies available to the United States; the reversal of a conviction is only one of them. Considering also human rights conventions and precedent from the European human rights court, the court concluded that the specific facts did not warrant any compensatory remedy and upheld the conviction on December 20, 2007.

Thu, Feb. 28, 2008

Heidelberg U. Seeks Alumni

CK - Washington.   A few days ago, Heidelberg University launched an offensive to communicate with its alumni in the United States. Lawyers and non-lawyers alike may contact the new Heidelberg Alumni Club USA which will soon begin operations in the United States and visit the freshly launched Heidelberg Alumni USA website, HAInet. The university sponsors an alumni meeting in the United States in October 2008.

Mon, Feb. 25, 2008

Moot Court with Top Justices

CK - Washington.   Five justices of the Supreme Court in Civil Matters, Bundesgerichtshof, in Karlsruhe, Germany will judge the national moot court competition conducted by the European Law Students' Assocation, the court announced today. The teams competing on March 7, 2008 will be from law schools at Leipzig and Kiel.

The court's press release describes the dispute as one involving the sale--through an agent bestowed with a notarized power of attorney--of riparian real estate with attached fishing rights and encumbered by upstream milling rights. The purchaser wants the first, opposes the second and demands that the mill, chartered in 1817 as a corn mill and now operating as a power station, cease operations interfering with the fishing rights or that the purchase be rescinded.

Tue, Feb. 19, 2008

Torts and Arbitration

CK - Washington.   An American arbitration clause provided by contract for retail securities transactions does not cover tort claims arising under the German statute for investor protection, the Düsseldorf appellate court decided on December 20, 2007 in the matter I-6 U 225/06. The decision does not name the American brokerage but states that it is a major internationally active entity operating in conjunction with brokers in Germany who produce customers.

The dispute centers on options trades, kick-backs and churning in securities accounts in violation of German law. The court does not mention which state law applies to the contract. It analyzes the German federal conflicts of laws rules codified in the EGBGB code and then applies German law.

The unenforceability of the arbitration clause derives from the fact that the German statute for the protection of investors requires commercial parties or an agreement reached after the tort occurred for the clause to be enforceable. As a result, the American brokage is subject to the jurisdiction of the German courts and shares liability with its German producer for the tortious activities under German law, without the benefit of contractual limitations of liabilities and jurisdiction. [arbitration, jurisdiction, conflicts of laws, liability, German law]

Mon, Feb. 18, 2008

German Fear of Anonymity

CK - Washington.   Another nail in the wireless Internet coffin. By summary order, the Düsseldorf appellate court announced that WiFi users should install password protection and encryption in order to insulate themselves from contributory liability for alleged copyright violations perpetrated by third parties through wireless routers.

By leaving the router open, the court found a user to have afforded third parties with the protection of anonymity that allowed them to break the law by downloading content from the Internet. Therefore, the user should suffer the consequences and be held liable for alleged illegal downloads.

Anonymity is frequently seen in a negative light in Germany, despite volumes of laws on privacy and protection of data that are designed to shield individuals from invasion into their personal space. The apparent policy conflict does not seem to disturb many German courts, just as in this December 27, 2007 ruling in the matter I-20 W 157/07. Like this court, most courts also disregard the benefit of ubiquitous Internet access which will hurt German competitiveness and R&D in Internet technologies. [wireless, WiFi, copyright, violation, liability, privacy, data protection, router, third-party, Internet]

Sat, Feb. 16, 2008

Tax and Ethics Scandal

CK - Washington.   The tax and ethics scandal rocking Germany involving business leaders has led to the resignation of one of the most powerful executives and to questions about government investigators buying tainted information. Corporate icons have often been accused of greed, such as American-sized incentives and bonus awards without solid contractual basis.

But nobody expected a huge-scale tax evasion scheme which now appears to be unfolding. The flipside of questionable ethics by business involves ethics in enforcement. Questions are being raised over the alleged purchase by the German government of stolen banking information from a bank employee in the Liechtenstein tax haven.

The federal government websites, such as at the Chancellery, the federal criminal service and the federal tax department, are currently devoid of comments or explanations. The finance department's website carries a number of February 2008 reports on tax evasion, tax ethics and tax justice and stronger enforcement of laws against untaxed services, but nothing on the investigation of former McKinsey consultant and Post CEO Zumwinkel.

Wed, Feb. 13, 2008

Election of Con Law Justices

.   Law student blog Jurakopf links to a PDF file describing the principles of the appointment of justices to the German constitutional court, Bundesverfassungsgericht, in Karlsruhe. The research service of the federal diet in Berlin, a counterpart to the Congressional Research Service, prepared the document so that it has some authority.

Mon, Feb. 11, 2008

Plagiarism Awards 2008

CK - Washington.   German trademark blog Markenblog displays a number of examples of plagiarism. It is not only Chinese companies that sell blatant copies. There are also a Dutch company imitating a German product and a German copy of Swiss equipment. In 1977, Plagiarius was formed by a designer who ran into copycats. The organization presents annual awards, symbolized by a gnome, for the most outrageous knock-offs.

Sat, Feb. 02, 2008

German Statutory Legal Fees

CK - Washington.   German statutory fees for attorneys and notaries often befuddle foreigners. The statutory legal fees are tied to values, in litigation, for instance, to the sum in dispute between the parties. They are computed according to progressive schedules.

As a result, a matter with insignificant financial value and lots of work may appear surprisingly inexpensive while a matter requiring little work but involving a very valuable claim can seem excessively costly. A recent discussion in a mailing list of German attorneys illustrates the point.

There, the assignment involved a notary's services for the application for, and issuance of, letters of administration, Testamentsvollstreckerzeugnis. With assets held in a bank safe, the value of the estate is deemed to be 3,000 Euros and results in fees of less than 100 Euros. When the executor received the letters of administration and accessed the safe, clumps of gold appeared, a notary writes.

At that point, the actual value of the matter is known, and the notary has to recompute the fee and reissue the invoice to reflect the true statutory value. By contrast, an American attorney's fee could be in the thousands for the initial work, especially when it involves complex international inheritance issues, and may experience no adjustment after the true value is discovered.

Tue, Jan. 29, 2008

Milestone in Copyright Jungle

CK - Washington.   Along the zigzagging course of German rulings through the jungle of contributory liability for copyright violations, the Frankfurt court of appeals set a milestone now available at Medien Internet und Recht.

The December 20, 2007 decision in the matter 11 W 58/07 applies §97 of the recently revised copyright statute, Urhebergesetz, to facts involving the download of material protected by copyright through a computer system in violation of the act.

The court absolved the owner of the PC of contributory liability for the download by a third party. It held the owner not subject to a duty to monitor the user and prevent violations of the law. Such a duty might exist in narrow circumstances, such as when the owner knows of prior violations by the user in the course of such activities, the court reasoned.

Fri, Jan. 11, 2008

State Offices in Berlin

CK - Washington.   Next to the Holocaust memorial in Berlin, the German states, Länder, maintain branch offices in support of their participation in the German federal legislative process. At their Ministergärten address, some states, such as Brandenburg and Mecklenburg-Vorpommern, share buildings.

The states participate directly in the second chamber, Bundesrat, but their offices are close enough to the Bundestag, the general assembly with directly elected representatives. Brandenburg explains additional functions of the Berlin office as a center for communication with federal government agencies, trade associations, embassies and a showcase of the state in the German federal capital.

A congressional staffer mentioned recently that there is no equivalent to such offices in Washington. A walk around Capitol Hill led to Florida House. Florida's embassy provides gracious, unparalleled hospitality to all Floridians who come to our nation's capital.

Tue, Jan. 08, 2008

Corporate Registration Controls

.   The laws of the jurisdiction where a corporation is formed control the company's operations under a bill submitted to the Berlin diet on January 7, 2008, Brigitte Zypries, the federal attorney general, reported in a press release. The proposed statute covers also associations and other juridical persons.

The main effect is of the bill is that foreign entities with management headquarters in Germany and German companies headquartered abroad will be certain as to the applicable corporate law.

The statute clarifies an important issue under European Union equality and free movement rules. The attorney general notes that the statute, if passed, would also apply to non-EU entities. There is no valid reason to treat them differently, she added.

Sun, Jan. 06, 2008

License in Bankruptcy

CK - Washington.   A bill of December 5, 2007 seeks improved protection for executory license contracts in bankruptcy under German law. The new language in proposed §108a of the federal insolvency statute governs principal and ancillary obligations in license agreements.

The principal norm states that [a] license agreement concluded by the insolvent party with respect to intellectual property continues in force with effect for the bankruptcy estate. The rule for ancillary obligations is less strict; the continued validity of the agreement is contingent on the need of the licensee to retain rights to use the IP. The administrator of the insolvent estate may impose financial adjustments in the event that the contract should display an unusual disparity between license and consideration.

The bill is called Entwurf eines Gesetzes zur Entschuldung mittelloser Personen, zur Stärkung der Gläubigerrechte sowie zur Regelung der Insolvenzfestigkeit von Lizenzen. Among other matters, it also increases the personal liability of officers, directors and shareholders of corporations in Germany in the event of their failing to timely initiate insolvency proceedings.

Sat, Jan. 05, 2008

Organism Liability of Online Vendors

CK - Washington.   Contributory liability for acts of others has developed into a headache also for so-called affiliate marketing programs on the Internet. In such systems, a vendor contracts with an aggregator that provides access to websites of unrelated parties with whom the aggregator contracts for advertising space, unless the vendor contracts directly with a web space provider, such as a blogger.

The space providers receive from vendors or aggregators payment for sales, leads or clicks on ads generated on their sites. In Germany, the vendor is usually known as the merchant and the referrer website where the ad is placed and where referrals to the vendor website originate is known as the affiliate, whether or not the contractual arrangement provides for an affiliation in a legal sense.

An important issue for vendors is whether they remain insulated from liability for illegal content or omitted or insufficient disclosures on referrers' websites where vendors' ads appear. An overview of recent case law on the issue exists at the Affiliate und Recht website. Its operator relates a new decision on the Dr-Bahr website that holds the vendor civilly liable for infringements on referrer sites.

On December 12, 2007, the Potsdam district court held in the matter Az. 52 O 67/07 that the vendor is not insulated from liability for violations of the unfair competition statute, UWG, by the referrer. The violation in that matter consists of a privacy statement that the court found insufficient under German data protection law. The vendor was unable to defeat the result with general terms and conditions requiring referrers' compliance with the law.

The court dismissed the vendor's argument that it could not practically screen every website on which its ads appear. The court considers the space providers components of the vendor's distribution organism for whose acts and omissions the vendor is responsible. The organism theory obviates the need to examine whether the vendor is liable under theories of direct or indirect liability, the court explained. The reader wonders whether a newspaper advertisement would have produced the same result.

Decisions on contributory, indirect, secondary and vicarious liability, now enhanced by organism liability, validate suggestions frequently expressed in Germany that online activities be moved to offshore locales in order to avoid oppressive regulation. Generally, German law is no worse than others, and in some ways, favorable to business, but some courts display ignorance and fear of Internet matters that they resort to abstruse conclusions and remedies--especially in the unfair competition and consumer protection areas--which effectively discourage Internet business and innovation.

Fri, Jan. 04, 2008

Phone Surveillance Rules

CK - Washington.   One of the many revised German laws that entered into force on January 1, 2008 governs the expanded authority for phone taps in the criminal procedure code. The statute is available from Bundesanzeiger Verlag as a PDF with the title Statute for the Reform of Telecommunications Surveillance and Other Concealed Means of Investigation as well as the Implementation of EU Directive 2006/24/EU, in German.

The core sections of the statute amend the code of criminal procedure, Strafprozessordnung, in §100 StPO. Phone tapping is authorized in the event of certain suspicions of severe criminal activities if other means of investigation do not prove promising or sufficient. According to a much-mirrored law blog note, potential clients now fear phone calls to criminal defense lawyers because the call by itself would indicate a need for a lawyer and, therefore, make them appear suspicious.

Tue, Jan. 01, 2008

Authors Object Under Copyright Act

CK - Washington.   On January 1, 2008, German authors are confused. Revisions to the Copyright Act, Urheberrechtsgesetz, enter into force today. A new provision, in § 137(1), appears to require their affirmative action to prevent the publication of old works in new media without their express consent.

Archivist blog Archivalia published various opionions on the due date for objections to be filed by authors with publishers and now understands the law to mean that the due date does not fall on December 31, 2007, as widely reported, but a year later.

Meanwhile, authors who objected in order to preserve their works for publication through open access media run into the dismissal of their objections by publishers who argue that the waivers are either formally improper or substantively inapplicable. The latter category includes contributions to journals and collective works. The publishers' association, Börsenverein, spearheads the effort and published a manual on new media law.

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